Leading in a time of technology disruption – An audit firm perspective

Leading in a time of technology disruption – An audit firm perspective

The first commercial floppy disks, developed in the late 1960s, were 8 inches (200 mm) in diameter; they became commercially available in 1971 as a component of IBM products and then were sold separately beginning in 1972. The storage capacity of this disk was a mere 360Kb of data. So minute that it was only capable of handling a few lines of text. Privileged to be entering the Y2K period, I am grateful to having been exposed to the world of computing in year 2000 and by this time, the floppy disk was now carrying only 1.4Mb of data. This was a bit more that what Bill Gates is famously quoted to have recommended as he said, “640K ought to be enough for anybody.” It was fashionable for one to be seen carrying a case full of these and in different colours as a show of high technological appreciation. Only to imagine that these were 10.44Mb of data, a lot of millennials would be forgiven for laughing uncontrollably at that imagination. Fast forward to 2020 and Kingston has released a 2Tb flash drive. Within 30 years data holding capacity has increased a million times. An evolution that if Jimi Hendrix were to wake up from his eternal sleep he wouldn’t believe that he can now put his entire music collection on a flash drive which fits in his watch pocket. Such has been the development of technology in every direction that today it continues to present us with a threat of loss of so many jobs and people’s livelihoods. You talk of IoT, block chain, artificial intelligence, data science, robotics to mention but a few. These emerging technologies are reshaping the world of computing by providing new possibilities in a world of ever increasing data.

The accounting and audit field is one that has not been spared by this  technology advancement. Research and development teams in some of the top accounting and audit firms in Zimbabwe are grappling with a need to stay up to date with technology while balancing that with matching staff skills and this technology. Some of the firms have adopted a re-skilling strategy to ensure personnel are adequately equipped to manage these technological changes either within or external to the firm. This strategy has seen some personnel crossing the floor from performing purely accounting and audit functions into combining these with some of the emerging technology driven ones like data analytics and technology risk assurance. Though this strategy may seemingly be a viable option it has not been an easy one for many to transition into. However, with dedication, effort and high quality learning support from within the firm, Forbes Research shows that more than 90% safely make it through and enjoy using this diverse combination of skills. Those successful have also indicated that they have found themselves being of value to their firms and clients than they were in a mono-direction career.

To promote the continued development and use of these emerging technologies from quantum computing to internet of things all which generate insurmountable amounts of data, firms in developed countries have anchored new service lines on them. This has ensured that apart from providing a platform for continued career development within, firms have been able to retain their best staff. In addition, firms have managed to get a return on the technological investment by offering these services to their clients. In that regard firms have become innovation hubs within their spheres of influence and an anchor for supporting client technology strategy.

But what of the firms that are in developing nations such as Zimbabwe? Much of these technologies have not taken root and are seemingly an expensive investment . The author however contends that this is the time that firms should be investing in technology, not only as way of improving their employees but a way of expanding the revenue lines. With many still coming to terms with the impact of Covid19 which has threatened the very existence of many companies this is the time that firms should be rising to the occasion and shoring up their technological capabilities. During this Covid19 driven lockdown period research has shown that there has been extensive use of technology in many areas such as education, work from home, robots in hospitals, drones for deliveries, applications for information dissemination among other things. This unprecedented use of technology has seen many companies revising and investing in their technology transformation strategies in areas such as data analytics, cyber security and more. Audit firms in Zimbabwe should be looking at diversifying their lines of service to include those that have been opened up by technology not only to retain their valuable employees but to remain profitable in the wake of the global pandemic and thereafter. The big four affiliated firms -PwC, Deloitte, KPMG and EY - already have access to these world class technologies and it becomes a matter of making more research into understanding client and matching these with such technologies.

In addition to investing in other lines of service such as software development and cyber security, firms can also invest immensely in data analytics. In a recent study conducted by the Forbes magazine, it has discovered that data science and artificial intelligence can improve audit quality. Through the use of this technology firms can gain more knowledge and insights  that reveal more about a company, its risks, its  financial reporting controls and its operating environment. The bottom line is that these technologies will empower and enable audit engagement teams to make key judgments and deliver high-quality audits. These capabilities may allow auditors to test 100 percent of a company's transactions instead of only a sample of the population. Firms need to promote the use of technologies among its staff members to generate the required interest in their use.

Audit firms in Zimbabwe have the opportunity to become technology strategy drivers in Zimbabwe, to influence and drive the implementation of the use of technology. Research shows that employees in Zimbabwe have not been productive during this lockdown period as a result of challenges that include;

·       Prevalent use of legacy technologies which are not capable of supporting a work from home strategy

·       Low usage of business applications that support secure remote access.

·       High cost of internet services, and

·       Lack of investment in emerging technologies

With its vast pool of experienced and skilled personnel both in and outside of Zimbabwe, the audit firms have the potential of becoming the technological hub of the nation or even Africa as a whole. There is need for someone to take a stand and seize the current opportunity and provide leadership in building up Africa’s own Silicon Valley in Zimbabwe. The extent to which these advancements will shape the future of audit is yet to be determined but the time to make inroads is now. It only takes the will and much will grow from it. My favourite author says; “Do what you can, where you are and with what you have”. The time for looking externally to what people can do for us is over. It is time for audit firms in Zimbabwe to take a stand and create a technological footprint that supports a drive towards a digital economy.